Must Local Governments Choose between Growth and Safety Nets?

12.5.2012 | Local municipalities face a mixed bag of incentives in serving the most vulnerable families in their community.  In many respects, local governments would much rather use their clout and funds to support broader economic development, in hopes the new jobs created will negate the need for a safety net altogether. As Network chair Margaret Weir notes in her recent paper, “Building the Local Social Safety Net in an Era of Fiscal Constraint,”

“local governments possess strong political and economic incentives to ensure a high quality of life that will attract and retain prosperous residents and businesses. Moreover, local governments have little fiscal incentive to support redistribution to lower income residents, even when they face political pressure to do so.”

So are the more vulnerable families left out in the cold?

Not always, finds Weir, who will be presenting this paper December 6 at the University of Illinois, Chicago’s Urban Forum on Metropolitan Resilience in a Time of Economic Turmoil. Some local governments are facilitating new coalitions of providers, advocating or lobbying for more funds, or coordinating existing service providers. But unfortunately, the more common response of municipal governments is to either dissuade families from seeking services or avoid the problems altogether.

But first, to the positive stories. ”Even though local governments devote a small proportion of their budgets to redistribution,” writes Weir, “their critical roles as connectors, system builders, innovators, and advocates make them essential partners in building a strong social safety net.”

As nonprofit organizations increasingly act as a shadow government providing housing, income, and many other supports for low-income families, municipal governments can act as the coordinator of these myriad efforts. A 2010 study by the Urban Institute identified 33,000 nonprofit health and human services agencies operating nationwide, and nearly 200,000 contracts and grants providing services from job training to preschool programs to elder care.

Municipalities, Weir writes, can play a critical role in coordinating and facilitating greater access to services. Local governments, for example, can foster connections between the many service providers in communities and among nonprofit agencies that deliver the bulk of social services. They can also be the catalyst for building a system of supports. New York City’s EARLYLEARN NYC, for example,  merged child care, Head Start, and universal pre-kindergarten funds to support system redesign.

In another example, the Chicago metro area build a regional system of affordable housing. The Chicago Regional Housing Choice Initiative established a consortium among five local housing authorities to make housing choice vouchers more portable across the region. Overseen by the Metropolitan Planning Commission, the initiative combined the efforts of philanthropic and civic organizations, as well as the region’s metropolitan planning organization and the Metropolitan Mayors Council.

Municipalities can also be innovators in safety net programming. San Francisco, for example, launched a health care access program Healthy San Francisco in 2007, offering health services to uninsured residents whose annual income is at or below 300%  the national poverty line. The effort was  funded by a tax on businesses that do not provide health insurance for their employees. Seattle  worked with the Neighborhood Farmers Market Alliance to encourage the use of food stamps at farmers markets with a program that doubled the value of purchases up to $10 a day.

Local governments can also be strong advocates for social welfare providers by providing the support to secure federal and state funds or lobby to secure additional state and federal funds.

Unfortunately, however, the default for too many local governments is to ignore, avoid, or pass the buck on the problems of their low-income citizens, preferring instead to focus on  promoting growth policies that lure the creative class and build a quality of life for the more affluent to enjoy. In many instances, policies were designed to shield the affluent from the poor (and planted the seeds of the polarized divisions we see in our politics today). As Weir writes:

For a century, the laws governing municipal incorporation and zoning restricted the supply of affordable housing in most suburbs, shielding middle class and affluent communities from responsibility for low-income residents. Affluent localities prided themselves on providing a high quality of life for a population that relied on federal programs such as Social Security, Medicare, and the home mortgage deduction but had little need of a local social safety net. Roads, good schools, and perhaps parks were all these residents looked for from local government. These suburban localities have fought a largely successful battle to maintain their status by resisting policies –such as inclusionary zoning and other affordable housing initiatives — that would jeopardize current arrangements.

As the numbers of poor in the suburbs began to grow in the 2000s — the consequence of fast-growing immigration, the “demographic inversion” of elite whites back to central cities, among other trends — local governments in middle-class locales sought to stem the problem with anti-immigrant ordinances, enforcement of housing codes in order to limit the number of residents in a single dwelling, and police agreements with the federal government through the 287(g) program and the Secure Communities program.

At the extreme, some municipalities simply split off and separated themselves from the issue. As Weir notes, in the past 10 years, Fulton and DeKalb counties in Georgia “saw a spate of municipal incorporations as the lower-income populations in these counties grew and county governments sought tax and service increases to address new needs.”

But it’s not only the suburbs. Central cities create policies and practices to divert families from services as well.  New York City, for example, continued to require that applicants for food stamps be fingerprinted, even after the state abandoned the practice in 2007. It eventually ended the practice in  2012.

To overcome this tendency, Weir suggests several solutions, including a regional approach.

The current process for creating and locating nonprofit service providers is too bottom-up to achieve goals of efficiency and effectiveness in service delivery. While national and regional nonprofit intermediary organizations have sought to build more coherent systems and local governments have, on occasion, tried as well, states need to take a stronger role in ensuring adequate capacity in places where need exists.

Because there is no regional government, states or Metropolitan Planning Organizations need to monitor shifts in the location of need and identify holes in the safety net. Federal policy can help by incentivizing the formation of regional coalitions. Regional coalitions not only promote learning across the system, they also provide critical support for advocates seeking to create services in localities where local officials offer little support or stand in the way of developing services for low-income residents.

Connecticut has taken a step in this direction with the creation of a cabinet-level position that serves as liaison to nonprofit world. As Jonathan Walters reports in the May 2011 issue of Governing:

Gov. Dannel Malloy created a cabinet-level position for a liaison for the nonprofit world, and appointed Deborah Heinrich, a former state legislator, to the post. Heinrich says she has four basic goals. The first is to open up a direct line of communication between the governor’s office and the nonprofit world, something that has heretofore been nonexistent. Second, to “answer the question of how we as a state can clear the path so that nonprofits can focus on the services they provide versus the bureaucratic demands of government.” Third, assess how government can encourage nonprofits to adopt best practices, measure their performance, and encourage cooperation and collaboration among themselves. And fourth, to develop relationships with the state’s philanthropies on ways to “leverage dollars for system change.”

An example of a regional effort emerging from this approach is Coalition for Healthy Kids, a group of more than two dozen organizations across the region working to lower childhood obesity, led by the Stamford Hospital.

These and other efforts will be increasingly necessary as the toll of the recession continues to reach deep into communities across the nation. To truly thrive, metro regions must be as innovative in serving their most vulnerable citizens as they are in attracting the business creators and the creative class. “Quality of life” should apply to everyone.

photo credit: Aibob.

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